Correlation Between Smurfit Kappa and Aeon Co
Can any of the company-specific risk be diversified away by investing in both Smurfit Kappa and Aeon Co at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Smurfit Kappa and Aeon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smurfit Kappa Group and Aeon Co, you can compare the effects of market volatilities on Smurfit Kappa and Aeon Co and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Smurfit Kappa with a short position of Aeon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smurfit Kappa and Aeon Co.
Diversification Opportunities for Smurfit Kappa and Aeon Co
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smurfit and Aeon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Smurfit Kappa Group and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Co and Smurfit Kappa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Smurfit Kappa Group are associated (or correlated) with Aeon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Co has no effect on the direction of Smurfit Kappa i.e., Smurfit Kappa and Aeon Co go up and down completely randomly.
Pair Corralation between Smurfit Kappa and Aeon Co
Assuming the 90 days horizon Smurfit Kappa is expected to generate 3.15 times less return on investment than Aeon Co. In addition to that, Smurfit Kappa is 2.5 times more volatile than Aeon Co. It trades about 0.04 of its total potential returns per unit of risk. Aeon Co is currently generating about 0.31 per unit of volatility. If you would invest 2,260 in Aeon Co on November 29, 2024 and sell it today you would earn a total of 140.00 from holding Aeon Co or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smurfit Kappa Group vs. Aeon Co
Performance |
| Timeline |
| Smurfit Kappa Group |
| Aeon Co |
Smurfit Kappa and Aeon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smurfit Kappa and Aeon Co
The main advantage of trading using opposite Smurfit Kappa and Aeon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smurfit Kappa position performs unexpectedly, Aeon Co can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aeon Co will offset losses from the drop in Aeon Co's long position.| Smurfit Kappa vs. Boston Beer Co | Smurfit Kappa vs. China Resources Beer | Smurfit Kappa vs. Molson Coors Beverage | Smurfit Kappa vs. BOSTON BEER A |
| Aeon Co vs. Nippon Steel | Aeon Co vs. Cairo Communication SpA | Aeon Co vs. COMBA TELECOM SYST | Aeon Co vs. BlueScope Steel Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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